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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: TimF who wrote (4734)2/21/2007 2:42:59 AM
From: Carl Worth  Read Replies (3) of 5205
 
whether you buy the stock at the same time you sell the calls, or already own the stock, is immaterial

your outlook is based on where you think the stock is going from that day's price...if you sell calls, no matter how long you have owned the stock, that's a neutral to slightly bearish move, for the reasons that i stated

it's true that if you sell OTM calls, that becomes a more bullish play as the calls are farther and farther OTM, but that wasn't the strategy as described in the original post...the original post was a combination of looking for a 3% a month return from covered calls, and hoping/gambling for a post-earnings pop on the stock, and my point was that those two "strategies" don't mesh well

your last sentence simply repeats what i said...i write calls on stocks i think are going nowhere to slightly up...i certainly don't write them on stocks i think are going down
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